Deloitte Alert on credit market turmoil
07 Oct 2008
Deloitte (United States) has published a Financial Reporting Alert on Potential Counterparty Default and Other Accounting Considerations Related to the Credit-Market Turmoil.
Deloitte Financial Reporting Alert 08-14 (PDF 70k) addresses the impact that recent market events, such as the bankruptcy of Lehman Brothers Holdings Inc. and the credit-standing deterioration of other financial institutions, may have on an entity's financial statements. This alert focuses on the following:
- The impact of possible counterparty default on an entity's derivative contracts that are (1) designated as hedging instruments in cash flow or fair value hedging relationships and/or (2) accounted for under the normal purchases and normal sales exception criteria defined in Statement 133,1 as amended.
- Other accounting considerations associated with counterparty default (or potential default), highlighted in Appendix A of the Alert.
- Other accounting considerations arising from the current turmoil in the credit markets, highlighted in Appendix B of the Alert.